Spain, Country Bailout | featured news

Italy and Spain, battling searing market pressure in the euro zone's widening debt crisis, blocked agreement on measures to promote growth at a European Union summit on Thursday to demand urgent action to bring down their borrowing costs.

Spain's government said Friday it plans to make its official request for EU aid for its banking sector Monday, as discussions continue on ways to inject European aid funds directly into ailing Spanish banks.

Spain's banks would need 51-62 billion euros ($64-78 billion) in extra capital to weather a serious downturn in the economy, less than a 100-billion-euro aid package offered by the euro zone, independent audits showed on Thursday.

Investors fled from Spanish government debt on Monday, an immediate rejection of the country's planned bank bailout by the constituency it most desperately needs to impress: the buyers of its own government bonds.

Spain's banks need at least 40 billion euros (about $46 billion) in fresh capital to preserve the country's financial stability, the International Monetary Fund said Friday in an eagerly-awaited report.

Spain could decide this month to ask for a bailout for its troubled banking sector, a step that would make it the fourth country in the 17-member eurozone to seek help since the EU debt crisis broke out....

The International Monetary Fund says it has not been asked by Spain for a bailout and has not begun preparing one.